Traders on the floor of the New York Stock Exchange, July 12, 2022.
Source: NYSE
U.S. stock futures were little changed late Sunday after last week’s broad gains pushed the S&P 500 to its best week since March and its highest level since last August.
futures Linked to the Dow Jones Industrial Average Add 6 points, or 0.02%. S&P 500 Index Futures and Nasdaq 100 Futures are hovering below the flat line.
Stocks ended the week higher on Friday after the release of strong jobs data for May.this Dow It rose 701.19 points, or 2.12 percent, its best one-day gain since January, to end the week at 33,762.76.this S&P 500 Index rose 1.45% to 4,282.37, while Nasdaq Composite Index It rose 1.07 percent to 13,240.77, its sixth straight weekly gain.
President Joe Biden signed the debt ceiling bill into law over the weekend, averting a potentially catastrophic U.S. government default.
Investor sentiment was buoyant on Friday after the Labor Department reported a blowout in May nonfarm payrolls. Public and private payrolls rose by 339,000 in May, compared with a Dow Jones estimate of 190,000. Average hourly earnings rose at a 4.3% annual rate, slightly below economists’ expectations, and the average workweek fell by a fraction. The report eased fears of an impending recession.
“While a growing number of leading indicators point to a looming recession, continued strength in the labor market and stubborn levels of personal consumption are further fueling a recession,” said Mace McCain, chief investment officer at Frost Investment Advisors.
“We don’t think the economy will go into recession until employment has weakened significantly,” he added. “With every decline in job openings since the 1950s, unemployment has spiked, but this cycle hasn’t happened yet. This cycle has yet to happen. The trend is likely to continue, delaying the recession.”
More importantly, investors are focused on the factors that have so far justified modest gains in 2023, led by a handful of tech stocks that have been driving the rest of the market, and whether, if that happens, there will be a mid-term Correction breadth is not improved.
“The big question is whether the breadth can continue, which could breathe new life into a previously very narrow rally,” Yung-Yu Ma, chief investment strategist at BMO, told CNBC.
“Recent developments in the banking sector have also been encouraging, with recurring signs of strength in the labor market reducing the risk of a negative outcome. Monday’s services PMI data and factory orders could help reinforce the positive narrative,” he added.
On Friday, the S&P 1500 regional bank index soared 5.5 percent and the Russell 2000 index of small caps rose 3.6 percent, both well ahead of the S&P 500’s 1.5 percent gain. Almost half a dozen stocks rose and fell on the New York Stock Exchange.
Meanwhile, the week ahead is a lot more muted after a strong month of first-quarter results. Investors will learn about food pricing and demand for JM Smucker, Campbell Soup and United Natural Foods. Stitch Fix, Signet Jewelers and DocuSign also plan to report results.
On the economic data front, traders will get PMI data for May from the Institute for Supply Management and S&P Global on Monday, along with factory orders and durable goods for April. On Wednesday, the Mortgage Bankers Association will release the latest data on home loan applications.